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Choosing Best Texas Term Life Insurance Carrier

Choosing the correct company when purchasing Texas life insurance coverage is more important than with any other type of insurance purchase.  The reason the quality and financial stability of the carrier is so important is that the consumer is accepting the stability of the company today for a transaction that may not occur for ten to thirty years.  The consumer needs assurance that the company will stand the test of time and will be there to pay the policy beneficiary in the future.  The aspects of an insurance company that should be evaluated include the amount of money under assets, the length of time in business, and the company’s financial rating from at least one of the major rating organizations.  The major companies that rate insurance carriers are AM Best, Moody’s, Fitch Group, and Standard and Poor’s.  The financial rating companies all use different letter grades for their ratings.  A general rule of thumb used in the industry is to select a company within the top four ratings.  Any lower than the top four ratings exposes the policy holder to unnecessary risk.  The company should have a minimum rating of excellent, which translates to A-, or higher. 

Consumers tend to be more concerned with who they purchase car insurance from than the company that provides their Texas life insurance.  The risk with a car insurance policy is no more than the premiums paid during the period of time before the next renewal, typically six months.  Compare this situation with a life insurance policy that is paid over thirty years to a company that is no longer financially viable and goes out of business.  If the policy holder secured a permanent life insurance policy and made over 360 payments with a monthly premium of $100, the potential loss of premium would be $36,000.  Insurance carriers typically reinsure for these premiums, but nonetheless the amount paid would be at risk and a death benefit would be in jeopardy if a claim was made.  An additional problem would be created because the premium for replacement coverage would be much higher.  If the policy holder has become uninsurable the possibility of coverage would be eliminated altogether. 

As a consumer it is important to choose a financially strong carrier and to work with an agent who represents several carriers with similar financial ratings.  The number of carriers an agent represents may be limited or reduced by weakened financial ratings of one or more carriers.  Consumers should examine in detail life insurance proposals from carriers offering a substantially lower rate to validate the financial rating that supports the coverage offer.  Licensed Texas life insurance agents make a point of staying informed regarding financial ratings and receive communications from trade association publications and industry journals regarding changes in the financial ratings of companies.  Discussing financial ratings of the carriers with a licensed agent is an excellent way to become comfortable with a decision with which the consumer may live with for the next 20 plus years.




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